Bengaluru’s net absorption at 2.7 mn sq.ft. in Q3, vacancy levels in single digits: JLL

By: |
November 5, 2020 2:59 PM

The city saw new supply of 4.7 million sq. ft. as compared to almost no additions in the previous quarter, it said in a statement.

Office spaces are required to redesign keeping the safety of the employees as a priority and follow the new social distance norms.Office spaces are required to redesign keeping the safety of the employees as a priority and follow the new social distance norms.

The IT hub of India,Bengaluru witnessed a net absorption of 2.7 million sq.ft. of office space in the third quarter of 2020, at par with the levels of the first three months of the current calendar year, according to property consultant JLL’s research.

The city saw new supply of 4.7 million sq. ft. as compared to almost no additions in the previous quarter, it said in a statement.

Bengaluru is likely to witness an addition of one million sq ft of office space in the fourth quarter of which 70 per cent is pre-committed, JLL said.

SBD (Outer Ring Road, Banerghatta Road) accounted for two-third share of the total net absorption at 1.8 million sq ft during the quarter.

Leasing continued to be driven by IT/ITeS, followed by manufacturing/industrial and e-commerce sectors.

Within the city, the SBD submarket saw the highest addition of 3.2 million sq ft, followed by peripheral markets of Electronic City & Whitefield.

Outer Ring Road continues to be the most sought after location with over 60 per cent share.

Rahul Arora, Managing Director (Bengaluru),JLL India, said: “While most technology firms still continue to have mass WFH, leasing momentum continues to strengthen with a number of new Request For Proposals (RFPs) that were released in the market in October-2020”.

The city vacancy increased to 6.5 per cent in Q3 2020 from 5.3 per cent in the previous quarter due to the combined impact of higher net supply infusion into the market and significant exits by select large occupiers.

Overall rents saw a marginal rise of one per cent during the quarter on the back of higher occupancies.

Whitefield saw the highest jump of about 2.3 per cent in rentals, followed by SBD and Whitefield at 1.2 per cent each.

“At the same time, select developers are willing to discuss and offer extended rent-free periods, discounts on parking charges and common area maintenance charges on a case-to-case basis. However, there are no instances of discounts on headline rents or rental waivers”, the statement said.

In an attempt to rationalise operational costs and achieve an impact on overall bottom line, more and more large occupiers are looking to restructure existing leases.

Overall outlook for the city remains positive with continued investor interest and the recent land deal by Godrej Fund Management and active scouting of office assets by Blackstone and Brookfield corroborate this view, according to JLL

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